In September 2010, the NBER's Business Cycle Dating Committee decided that the recession that began in December of 2007 had ended and that the lowest point of production was July of 2009. The NBER does not use a popular definition of recession-two quarters of falling GDP-but looks at a variety of monthly statistics to date business cycles. In business cycle terminology, what does July 2009 mark?
A. The duration of the recession
B. The peak of the cycle
C. The trough of the cycle
D. The depression of the cycle
Answer: C
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The production possibilities frontier slopes downward and to the right because of limited resources.
Answer the following statement true (T) or false (F)
If we compare regulating a natural monopoly using a marginal cost pricing rule to using an average cost pricing rule, we see that output is
A) greater with marginal cost pricing, but average cost pricing allows for costs to be covered. B) the same under both cases, but the profit is greater with average cost pricing. C) greater under average cost pricing, but profits are greater with marginal cost pricing. D) the same but profits are greater with marginal cost pricing. E) greater with marginal cost pricing, and the firm's profit is larger with marginal cost pricing.
Economic profit equals NOPAY plus capital charges
Indicate whether the statement is true or false
If the interest rate is 10%, then $1 received one year from now is worth how much today?
A) $1.10 B) $1 C) 91¢ D) 90¢